NATIONAL INTELLIGENCE DAILY (CABLE)

Created: 9/18/1980

OCR scan of the original document, errors are possible

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SITUATION REPORT IRAN

Traqi President Saddam liuaoein'tt abrtt'iation. ycctcrda'j of1 Algicm Accord .vr'tft ffoi'wC 7w7 intend* to force further border change* v

Saddam declared the accord "null andaying that Iran had violated its terms by interfering in Iraqi domestic affairs and by failing to return disputed Pointedly warning Iran to benefit from recent militaryaddam called on Iran to >eturn oil the land "usurped" from Iraq and the Arab nation, the lattereference to tho three islands near tho Strait of Hormuz occupied by Iran1 and still claimed by the United Arab iSmirates. He also said that Iraq had decided to restore "complete legal and effective" sovereignty over tho Shatt al Arab.

Iraqi leaders have been encouraged to move against Iranariety of reasons. The Iranian military is weak and disorganized, presenting Baghdadnique opportunity to redress tho terms of on agreement the Iraqis believe was unfairly forced on thornhen suporior power. Iran's revolutionary regime is also fragmented politically and isolated internationally with no superpower ally to deter external aggression, j

Iraqiay believe that their harshof Shia Muslim dissidents earlier this year has put the security servicesetter position to control Iraq's majority Shia community. Iraqi propagandathe Arab-Persian nature of the dispute also probably has helped build popular supportonfrontation with Iran. |

ore immediate factor in building support forstance against Iran probably has beenmilitary's performance.

fTxxnai Iraqi awisiei. on now mucneeded to secure Iraq's goals probably hinges on Iran'

response to Saddam Hussein's demands.//

Iranian Reaction

Tehran has not yet formally replied to Saddam's speech, but press reports indicateember of Presi dent Bani-Sadr's staff characterized itdeclaration of war*" Iran is unlikely to accept any changes in the border, especially along the Shatt al Arab. Tho Abadanajor supplier of fuel for domesticand the ports of Khorramshar and Abadan, which accounted forercent of Iran's import tonnage last year, are located on the Shatt.

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